Knowing when to trade in your old car is a challenge, and making an incorrect decision could have serious financial ramifications over the long term. A car purchase is typically the second largest purchase most people make and therefore, should be planned carefully. Many factors play into the decision to trade cars, including the condition of your present vehicle and how you use it.
If your car has quite a few miles on it, it may be time to trade it for a newer model. Today's vehicles are designed to last well over 100,000 miles, and according to the research firm R.L. Polk, the average age of cars on the road in America is approaching 10 years. Regardless, as cars get older, the warranties expire and you may be more comfortable driving a newer car with a full manufacturer's warranty. This may make trading worthwhile for you.
As fuel prices increase, you may be thinking more about how much you spend each month in gasoline. Buying a car that saves a few miles per gallon could translate into big fuel savings per year. Also, it may be important to you to be more environmentally friendly and trade in a car that is more polluting for one that is cleaner and better for the environment.
As your needs change, the vehicle you drive may need to change as well. If your family is getting bigger, you may need more seats and may need to upgrade to a bigger vehicle to give your growing family the room that it needs. The same is true if your children are leaving home, and less room is necessary. You may also need to haul more cargo, due to a job change, and find a pickup truck is a better fit for you.
Higher Repair Amounts
If you are faced with a high repair bill on your present vehicle, it may be a cost-effective choice to trade for a new or newer vehicle. Often, if a projected repair bill costs more than what the value of the vehicle is, many experts do not recommend investing the money in the repairs. A dealership may have incentives for trading in this vehicle, allowing you to avoid paying to repair your present vehicle.
Craig Woodman began writing professionally in 2007. Woodman's articles have been published in "Professional Distributor" magazine and in various online publications. He has written extensively on automotive issues, business, personal finance and recreational vehicles. Woodman is pursuing a Bachelor of Science in finance through online education.